Weekly Update July 28-August 1
Kuros, Three Earnings Reports, Quarterly Summaries, Short Report Rebuttal
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Kuros Biosciences is a Swiss company that grew 80% last quarter and is breakeven on the bottom line. The company helps spine surgeons grow new bone. Its flagship product, MagnetOS, is a calcium-phosphate putty that fills the gap between two vertebrae. The body treats it like real bone and grows around it, so surgeons skip harvesting the patient’s own bone, which can cause complications. One very interesting thing about the company is that it recently signed a 5-year distribution deal with Medtronic in select territories. Medtronic is the biggest player in this space by far so it’s telling that they would want to sell a small Swiss product. There is another key competitor in Sweden, called BoneSupport (the product is Cerament) that is growing very nicely.
Kuros does seem to have a differentiated product but there is still strong competition from Stryker and Zimmer which is why the Medtronic deal is important. Management estimates they can grow 60% for the year and continue on a near 40% CAGR for the two years after that. The stock is expensive at 12x TTM sales but there is a clear growth runway in a market where surgeons stick to products that work. If Kuros can continue to prove this and get added distribution from Medtronic, the forward multiple could be much more reasonable.